Why is it 'easy' to steal from youth sports teams?

Why is it 'easy' to steal from youth sports teams?

For about six months, people would stop Marianne Kinsmann in her tracks, point to her Little League World Series jacket and ask about Holbrook Little League’s time in the tournament last summer.

“You guys went so far,” fans of the Jackson-based team would say. “We were all rooting for you.”

The Holbrook Little League All-Stars celebrate their District 18 championship in 2017. While the team was winning on the field, the league’s financials were in disarray off of it. (Photo: Doug Hood)

Now nearly a year after the team of 12-year-old All-Stars — including her son, Ryan — went on their miracle run, their former fans’ tone has changed following a high-profile arrest of the group’s president and treasurer. “Oh, it’s such a shame,” they said about the team. “It’s really sad.”

“People are always asking, and that’s the worst part of it,” Kinsmann said. “They are really connecting Holbrook with this theft rather than the Little League World Series.”

But in reality, oversight of nonprofits are so lax that it makes theft from youth sports as easy as hitting a T-ball.

Even after the loss of more than $1 million dollars in recent years, the weak laws and poor oversight remain in place, enabling the next set of thieves to steal from parents and young children, an Asbury Park Press investigation found.

Youth sports is a big business. One watchdog estimates that parents spend $800 million on youth sports in New Jersey, and the 150 youth sports leagues in Monmouth and Ocean counties brought in $18 million in revenue last year. But the Press found just 16 of those leagues follow the laws that are supposed to ensure nonprofits stay honest.

As of June, the majority of the leagues were in violation of federal or state laws requiring nonprofits, including youth sports leagues, to file annual financial disclosures — similar to tax returns — with the IRS and the state Division of Consumer Affairs.

The IRS only takes action after three years of delinquent forms and there isn’t a single youth sports league at the Shore that’s had its charity registration revoked by Consumer Affairs, despite 54 leagues currently listed as non-compliant.

“Stealing from a youth league is easy,” said Jay Whitehead, CEO and co-founder of the League Network, a Newark-based nonprofit that helps youth sports officials raise money and stay on the right side of the law. “If it’s easy, people are going to do it.”

To understand the depth of the problems with youth sports, the Press reviewed hundreds of pages of nonprofit tax returns and police records and analyzed IRS data for every youth football, baseball, soccer, basketball and hockey team at the Jersey Shore.

The investigation found:

$1.4 million stolen. Authorities charge that more than $1.4 million was stolen from youth sports leagues over the last 10 years in Monmouth and Ocean counties by former officials of those leagues;

Revoked permissions. Of the nearly 150 youth sports leagues at the Shore, 22 have had their nonprofit status revoked by the IRS since 2010 — including three Little Leagues currently operating without a legal nonprofit status;

Lack of reporting. More than half of youth sports leagues were late on filing financial documents with the IRS. A document called the Form 990 is the only publicly available report that allows the public to see how youth sports leagues spend their money. Some leagues haven’t filed a Form 990 in more than a decade.

Nearly half violate the law. Four-in-10 leagues are violating state charity laws by not reporting their annual finances or conducting audits required by the state Division of Consumer Affairs, which oversees nonprofits in the state;

Almost half run a deficit. Nearly half the youth sports leagues at the Shore can’t cover their expenses with the money they take in, relying on one-off fundraisers to fill in the gaps with an annual deficit averaging $21,000. Sixty percent of those teams were also late on their IRS filings.

Nationwide, the youth sports market is estimated at $19 billion with 32.1 million kids playing in leagues — with estimates that it could grow to as much as $41 billion in 2023, despite a string of high-profile arrests in New Jersey and beyond.

“When I read about it in the Press, I had to do something,” said Assemblyman Ronald Dancer, R-Ocean. “We can’t let an alleged misappropriation of over $100,000 go unanswered without putting more accountability and transparency into the law.”

Janine Bianchino, 45, whose two sons have played for Holbrook, said the thefts prove the need for greater transparency among all youth sports leagues.

“It’s heartbreaking,” Bianchino said. “You’re stealing from children … We’re supposed to be a community. We like to think we have a good community around us, and to have a few bad apples steal from these kids, it’s an awful thing, but I’d hate to blame everybody for the few bad apples.”

Hear what one Holbrook Little League parent thinks of the problem in this video below.